Without an employer 401(k), the two most common retirement options for freelancers in the US are a SEP-IRA and a Solo 401(k). They sound interchangeable. They aren’t.
The core difference
| Feature | SEP-IRA | Solo 401(k) |
|---|---|---|
| Setup complexity | Very simple | Slightly more paperwork |
| Contribution types | Employer-side only | Employee + employer side |
| Roth option | No | Often yes |
| Loan option | No | Sometimes yes |
Who fits each one
If you want the simplest possible setup and don’t need a Roth option, a SEP-IRA is genuinely fine. If you’re maximizing contributions at a lower income level, the Solo 401(k)’s dual contribution structure often lets you save more per dollar earned.
“I switched from a SEP-IRA to a Solo 401(k) once my income stabilized — the ability to make employee-side contributions even in a slower year mattered more than the extra form.”
Start before it feels urgent
Compounding doesn’t care that your income is irregular. A modest, consistent contribution started a decade early outperforms a large one started late, almost every time.
